RealTime IT News

BT Cuts The Cost Of Net Access: Is The Pressure Taking Its Toll?

Signs that British Telecom (BT) is weakening in its stance on metered Internet access emerged Tuesday with news that it is cutting the cost of its subscription service and increasing the amount of time users can spend online.

As from Wednesday, Internet customers will be able to get unlimited weekend and weekday evening access for a monthly fee of #9.99 ($15.98) - reduced from #11.75 ($18.8) - giving them up to 78 hours surfing time over the seven days. The offer applies from 6pm to midnight during the working week, and from Friday midnight to Sunday midnight.

At the same time BT is cutting its annual subscription fee by 15 percent from #129.25 ($206.80) to #109.85 ($175.76).

Announcing the new rates, Ben Andradi - managing director of BT's Internet and e-Business division, claimed the new tariffs demonstrated the former state telco's commitment to attracting more people on to the web. He said the move also supported BT's long-term aim to be the nation's leading consumer ISP and portal, adding that further initiatives - as yet undisclosed - were in the pipeline.

But the cost-cutting measures come in the wake of a barrage of criticism that BT is dragging its feet over introducing cheaper Internet access for fear that it will be forced into cutting the cost of voice calls too - an area where it currently commands 85 percent of household traffic.

Chancellor Gordon Brown and telecoms watchdog Oftel have both indicated BT should move faster to adopt flat-rate tariffs for Internet access, similar to the charging models prevalent in the U.S. Mr Brown's comments earlier this month alarmed the City which wiped billions of pounds off BT's shares - leaving it vulnerable to a takeover.

At the same time rival operators like Telewest have already stolen a march on BT. Partially owned by Microsoft, the cable operator just recently offered people living in its 4.5 million-household catchment area unlimited Internet surfing for a mere #10 ($16) a month.

Meanwhile, what remains unclear is how BT's latest Internet tariffs leave its Surftime deal, unveiled just before Christmas and due to be launched in April.

Under Surftime, it's proposed that users will be charged a flat rate of #35 per month ($56) for unlimited evening and weekend access - significantly more expensive than BT's latest offer.